PIP reform 2026 - new powers for labour inspectors

What is the PIP reform and why does it change the rules of the game?

From 8 July 2026, the National Labour Inspectorate (PIP) has a completely new set of tools that could radically change how thousands of companies work with people engaged under civil-law contracts and B2B contracts. The reform, a flagship project of the Ministry of Family, Labour and Social Policy led by Agnieszka Dziemianowicz-Bąk, introduces the option of the administrative reclassification of a sham civil-law contract as an employment contract - without having to refer the matter to court, as was the case until now.

This change marks a fundamental shift in existing practice. Until now, PIP inspectors could only bring an action before the labour court to establish an employment relationship, which took months and often years. Now the whole process is intended to be faster and more efficient, which on the one hand strengthens employee protection and on the other raises serious concerns among business owners.

The scale of the potential changes is enormous. According to Ministry of Finance data, around 160,000 B2B contracts are fictitious businesses concealing a genuine employment relationship. In total, about 1.5 million people in Poland work under civil-law contracts, although not all of these contracts are shams.

Three steps of the contract reclassification procedure - how does it work?

The new contract reclassification procedure has been designed as a three-stage process that gives the parties time to comply voluntarily before the administrative authority intervenes with binding force. Understanding these stages is essential for any business owner who uses the services of contractors.

1. Request for voluntary correction - Where a PIP inspector finds that a civil-law contract or B2B contract is a sham, they set a deadline for concluding an employment contract or bringing the terms of the cooperation into line with the law. This is a chance to resolve the matter amicably, with no further consequences.
2. Administrative decision on reclassification - If the inspected entity does not comply with the request, the PIP inspector submits an application to the Regional Labour Inspector for an administrative decision converting the improper contract into an employment contract. This is the most significant novelty - until now, only a court could make such a ruling.
3. Appeal to the labour court - Both the employer and the worker have the right to appeal the decision to the labour court. Importantly, lodging an appeal suspends enforcement of the decision until a final judgment is issued, which is an important procedural safeguard.

It is worth stressing that this three-stage mechanism is the result of a political compromise. The original proposals of the Left included, among other things, the retroactive reclassification of contracts, which was rejected following the intervention of the Prime Minister and negotiations with the European Commission under the National Recovery Plan.

Who will PIP inspectors inspect first?

One of the most important questions business owners are asking is where PIP inspectors will appear first. Although the direction of inspections is formally decided by the Inspectorate itself, signals from the government suggest several likely areas of focus.

Companies with a history of irregularities

The head of the Left parliamentary club, Anna Maria Żukowska, said that labour inspectors already have "mapped" businesses where sham contracts have been found in the past. These will be inspected first. A new element is the exchange of data between the Social Insurance Institution (ZUS), PIP and the National Revenue Administration (KAS), which will allow inspection targets to be selected more precisely on the basis of risk analysis.

The healthcare sector

Minister Dziemianowicz-Bąk clearly signalled that public hospitals and healthcare facilities should not be left out of inspections. Many doctors work under B2B contracts, although the nature of their work - fixed hours, organisational subordination, work under supervision - may point to a genuine employment relationship within the meaning of Article 22 of the Labour Code.

Local monopolists in smaller towns

Unofficially, Left politicians also point to small and medium-sized towns, where a dominant employer imposes so-called junk contracts on workers, exploiting the lack of alternatives in the local labour market. It is precisely in such environments that sham contracts may be most widespread and most damaging to workers.

What risks does the reform pose for employers?

The PIP reform is not only about reclassifying contracts. The amendment provides for a number of additional changes that increase the legal and financial risk for business owners. The most important are worth noting.

First, penalties for breaches of employee rights are increasing. The previous sanctions were often seen as symbolic and ineffective. The new rates are meant to be a genuine financial burden, motivating compliance with labour law.

Second, remote PIP inspections have been introduced, which means an inspector does not need to physically visit the company's premises to verify that contracts are correct. Documentation can be analysed remotely, which significantly speeds up and streamlines the inspection process.

Third, reclassifying a contract as employment has far-reaching financial consequences: the need to pay full ZUS contributions, provide leave, comply with working time standards and, in extreme cases, pay benefits for a past period. Although automatic retroactive reclassification of contracts was ultimately dropped, the employer may be required to settle outstanding public-law liabilities.

Finally, we must not forget the reputational risk. Information about PIP inspections and irregularities found may harm the company's image among customers, business partners and prospective employees.

How to prepare your company for a PIP inspection? Practical tips

In view of the labour inspectorate's new powers, every business owner who uses civil-law contracts or B2B contracts should take immediate steps to review them. Here are the key steps worth taking today:

• Audit of civil-law and B2B contracts - review all current contracts for features of an employment relationship: subordination, fixed hours, work performed at a place indicated by the client, personal performance of work and periodic remuneration.
• Legal risk assessment - identify contracts that may be challenged by a PIP inspector and estimate the financial consequences of their possible reclassification.
• Adjusting contract wording and practice - where the cooperation is genuinely B2B, make sure the contract and day-to-day practice reflect its real, non-employment nature: freedom to choose where and when to work, the option of substitution, own tools and multiple clients.
• Legal consultation - use professional legal advice to assess your company's individual situation and prepare a strategy in case of an inspection.
• Preparing documentation - organise HR documents and contracts so that, in the event of an inspection, including a remote one, you can promptly provide the required information.

There is no point waiting for the inspector's visit. Proactive action helps you avoid costly consequences and minimise the risk of a decision to reclassify a contract.

Need legal support? Contact us

The PIP reform of July 2026 is one of the most serious changes to Polish labour law in recent years. The inspectors' new powers, the exchange of data between ZUS, KAS and PIP, and rising penalties mean that failing to prepare could cost your company far more than professional legal advice.

Our firm specialises in labour law, contract audits and handling PIP inspections. We help business owners assess risk, bring contracts into line with the applicable rules and effectively defend their interests if proceedings are opened. If you use B2B contracts or civil-law contracts - contact us today to discuss your company's situation and take the right steps before the inspector does.